Building Relationships With Financial Partners
A relative recently gave one of us a book of pithy personal advice with the humble title of "How to do Everything Right" (we won't dwell on the reason for this particular gift). Turning to the section on lending, I was startled by the mild paranoia emanating from its pages under such headings as "Tricks Banks Play," "What Banks Don't Tell You," and "Twelve Ways to Avoid Being Ripped Off By Your Bank."
As a credit union member, big banks are not always my favorite institutions. Yet I was still rather shocked at such combative jewels of advice as, "don't volunteer suggestions" about what you might need, and "be prepared with an expression of surprise and shock" when the banker mentions the interest rate. "Be wary if the bank president stops by to say hello -- it's likely to be just an "ego-building trick." In sum, be evasive, disingenuous, and think the worst of people.
My first thought was, "This guy really needs a vacation, a different bank, or both." But it got me thinking about relationships with financial partners: the lenders, accountants and auditors that make our numbers flow. We financial professionals don't flatter ourselves by thinking that we are always among a businessperson's favorite visitors. No one wakes up in the morning and says, "Oh good, the auditor is coming," or "I'm so happy I get to review my taxes today." But we do like to think that our relationship adds some value to our clients. So if you don't feel like you're getting the value you would like in your relationships with your financial partners, keep reading.
The first thing is easy to remember: do unto others as you would have them to unto you. A less poetic, modern bromide is "garbage in, garbage out." If you feel that you can't tell your banker what you truly need without "tipping your hand," maybe what you are holding in that hand is garbage. If you want clear, thoughtful, and honest advice from your accountant, you need to give him or her clear, thoughtful and honest information to work with.
Each transaction should not be seen in isolation but as part of a relationship. Find financial partners who know your business and value their relationship with you, and respect and value their time and expertise in return. Provide honest and complete information, ask clearly for what you want, thoughtfully weigh the reply, and ask one more time if you're not satisfied. Then be prepared to look elsewhere if you're still not happy.
If you put your loyal lender through the paces of reviewing and approving a loan request and then jump to another lender at the last minute because someone else offered you an interest two-tenths of a percent lower (saving you a whopping $1.21 per month in interest), you have not shown very much respect for either your loyal lender's time and expertise or for your relationship with him. In the short term, relationships (as opposed to transactions) cost a little money, but the money you spend should be worth it in the long haul. Sometimes "free" is the least valuable option.
We in the natural foods business think of ourselves as socially responsible businesses (as well we should), and we routinely ask our customers to pay a little extra for the privilege of shopping at our stores. We expect the same social and/or environmental commitment from product vendors, but we don't always ask these questions of our other service providers. In addition to asking a potential lender what their rate is, why not ask what they know about co-ops? Ask them in what ways they support other small businesses in the area. What do they see as their commitment to your community, and where do their profits go?
We often expect our own customers to look beyond the immediate transaction price and consider the value of the whole. As businesspeople, we have every right to expect both value and values from our financial partners as well, but we must be willing to give the same in return.